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Geofencing vs Geotargeting vs Beacons: When Should You Use Which?| By |Naman Kapur

Year on year, the time spent on mobile apps is increasing. Whether we like the fact or not, but a recent study has shown that the mobile usage continues to grow—and has reached to five hours per day. Let’s do a bit of math here . . . 5 hours out of roughly 16 hours when we are active . . . is close to 30% of our time and has risen by 20% as compared to 2015. This just goes to show that how important mobile is in people’s lives and how much they rely on them.

Our reliability on mobile apps had made way for location-based marketing which has gradually evolved to become a must-have in any marketing strategy. In fact, this makes more sense as serving information as per the user’s location is the best to catch their attention and get them to act on it. Let’s talk about Trevor Adams—he is just somebody I know and talk to when I need information—he recently went on a trip to Budapest as a weekend getaway with no research or planning whatsoever, when he came back he was his happiest and he couldn’t wait to give me some useful information. He is 27 years old and uses his mobile extensively for almost everything—from reservations, travel, shopping, chatting, socializing, etc. and has best of the apps for each purpose. His motive is to save as much as he can anywhere he goes or anything he does, so he keeps an app that sends him deals according to his preferences and interests.

It had been 12 odd hours since he had landed in Budapest and was exploring the town when he received a push notification that told him about the best shopping deals in Budapest. That push not only gave him a shot of happiness but also saved his time and money. The next morning, he felt tired due to a lot of reasons—jet lag, too much of local beer, long walks in the city and shopping—battling all of this, he took a hop-on-hop-off bus to take a city tour. After four stops his phone buzzed . . . intrigued, he took it out and checked the notification which said, “Hi Trevor! Try Széchenyi Thermal Bath to feel fresh for the entire day, click to see the best deals and directions.” The timing couldn’t have been better—the location was close and he really wanted to beat the lethargy, he happily got off the bus and walked toward Széchenyi Thermal Bath to experience it. It wasn’t over until he was taking a stroll at the airport while waiting for his returning flight that’s when he suddenly received a push notification on his phone just outside a food store. Bewildered, he did end up going in and purchasing some items he would’ve never bought were it not for the amazing deal he got courtesy that app.

It isn’t rocket science the way the app marketers targeted him—simply put, geotargeting, geofencing and beacons were used to push contextually personalized information at the right moment at the right location. These methods have been around for some time, just that it’s usual to often get confused which method to go for while strategizing the marketing campaigns. Let’s go deep dive with geofencing vs geotargeting vs beacons:

Geotargeting:

Using geotargeting, push notifications are sent according to the device’s last known location. For example, Trevor received the first notification above because marketers sent a push to all users who were in Budapest at that moment. This is a classic example of location based marketing where all other users get filtered and relevant information is pushed to people who can leverage it quickly in their current location. This is helpful for businesses that are present in multiple locations so that they can create different campaigns for users in each location.

Geofencing:

Geofencing works based on virtual fences and anybody who either enters, exits, or dwells for certain period of time can be targeted regardless of their device’s last known location. Széchenyi Thermal Bath, in the above example, had a tie up with the deals app that whoever enters the geofence should get a notification of the directions and deals. This is great for businesses who would like to attract users who are in the vicinity or are leaving the area without doing a specific activity or have spent some time there.

Beacons:

Beacons are simply small low energy Bluetooth devices that detect you—your mobile phone to be specific—as you come in the vicinity of them. They trigger a signal to the server which sends you a push notification containing extremely relevant information. The best part about this is that they are very cost effective and the batteries last for a very long time and even work in areas that don’t have WIFI or cellular signal but the downside is that the phone’s Bluetooth must be turned on for the beacons to detect it.

Beacons cannot figure who you are, what you did, or what you like—if your phone has an app that has been configured to receive notifications from beacons, you will receive a push whenever you come near them. These are quite useful in crowded places such as fairs or events where you have a stall or a booth. Also, for businesses who would like to push information to those people who are extremely close, to catch their attention and potential interest and convert.

The following table will summarize all the differences between the three ways of location-based marketing campaigns:

Geotargeting

Geofencing

Beacons

Best use for targeting people in a defined area

Best use for targeting people coming in, going out or dwelling inside a virtual fence

Best use for targeting nearby people who you would like to interact with

Generally used for a city or a specific location

Can be used anywhere where your users go, even around your competitors

Preferred in crowded or moving vehicles or in large retail stores that have aisles

Works on the basis of user device’s last known location

Relies on the GPS of the device

Works only if the device Bluetooth is turned on

For example, all the 32-year-old males who are only in Manhattan and showed interest in a particular item can be targeted

For example, a retail store can run a flash sale and anybody who is nearby can get a notification

For example, in a trade fair attract people to your stall by sending exciting offers who are just standing outside

Location based marketing although comes with disadvantages such as dependency on GPS, Bluetooth, etc but if used wisely can help with highly personalized user engagement and earn long lasting loyalty.